9911796707
TMI Blog2022 (3) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the assessee, for payment of interest on loan to the bank which was a part of its expenditure and not income. In this regard we have also perused the decision of coordinate bench of the ITAT, Delhi ACIT Vs. M/s Sangwari Primary Agr. Co-op Society Ltd. [ 2012 (12) TMI 1224 - ITAT MUMBAI] Thus payment of interest to the bank is an expenditure of the assessee and not income of the society, therefore, the ld. CIT(A) is not justified in confirming the said addition made by the A.O, therefore, ground no. 1 of the assessee is allowed. Since, we have allowed ground no. 1 of the assessee, therefore, ground no. 2 of the assessee for claiming deduction u/s 80P(2)(a)(i) of the Act on the amount of addition sustained by the ld. CIT(A) is not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliance to the various notices issued during the course of assessment proceedings, therefore, the assessment was finalized ex-parte u/s 144 of the Act on 20.12.2016. In absence of detail/submission the assessing officer has added the amount of interest expenditure of ₹ 1,54,68,608/- to the total income of the assessee. 3. The assessee being aggrieved with the order passed by the A.O has carried the matter in appeal before the CIT(A). The ld. CIT(A) stated that assessee has claimed interest amount of ₹ 1,54,68,608/- comprised of two component viz. one component being an interest in relation to various scheme/deposit paid to members and the other component pertained to the interest paid to the bank/overdraft loan. The ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 80P(2)(a)(i) of the Act. However, the ld. CIT(A) has deleted the amount of addition pertaining to interest paid to the members of the assessee society by considering the same as business expenditure. It is undisputed fact that assessee had borrowed money against its own fixed deposit to advance the same to the member of the society. The assessee has categorically submitted before the ld. CIT(A) that interest paid to the bank was expenditure and not the income of the society, however, without disproving contrary the ld. CIT(A) has rejected the claim of the assessee, for payment of interest on loan to the bank which was a part of its expenditure and not income. In this regard we have also perused the decision of coordinate bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because there is no such impediment imposed u/s 80P(2)(a)(i). The direct source of income is ultimately from the credit facilities provided to its members or from sale of seeds, agricultural implements to members only etc contemplated under section 80(2)(a)(iv). We, therefore, respectively following the decisions of Tribunal in the case of Palhawas Primary Agriculture Co-op. vs ACIT (supra), confirm the order of Ld. CIT(A). In the light of the facts and following the decision of the ITAT Delhi as supra, we consider, that payment of interest to the bank is an expenditure of the assessee and not income of the society, therefore, the ld. CIT(A) is not justified in confirming the said addition made by the A.O, therefore, ground no. 1 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
